World Gold Reserves
According to the recently released ‘World Gold Council’ report, central banks around the world are increasing their gold reserves due to economic concerns.
According to this, central banks around the world have bought gold at a record level in the third quarter of the year 2022.
The Reserve Bank of India is the third largest buyer among known buyers during the third quarter of 2022. It has added 17.5 tonnes of gold to its gold reserves.
Cause of this tendency
- Economic Uncertainty: The pressure of high inflation is increasing at present. At the same time, there remains uncertainty about global growth.
- At such times, gold can be used as an instrument to hedge against inflation without any default risk.
- Historically, gold has always been an important component of a country’s treasury.
- Due to the appreciation of the dollar, its weight in the country’s overall reserves increases.
- Gold can balance this temple to its necessary political level.
- The central banks of authoritarian governments rely on gold to deal with the hegemony of America and Western Europe.
- The impact of gold imports depends on the central bank of governments on gold.
Initiatives to reduce gold imports
Gold Monetization Scheme: Its objective is to collect gold held by households and institutions in the country and facilitate its use for productive purposes.
Sovereign Gold Bond Scheme (SGBs): SGBs are government securities denominated in grams of gold.
These act as an alternative to investing in physical gold.
Customs duty has been increased on the import of gold.
Source – The Hindu
